Game engine maker Unity (NYSE:U) reported Q2 CY2025 results exceeding the market’s revenue expectations, but sales fell by 1.9% year on year to $440.9 million. On the other hand, next quarter’s revenue guidance of $445 million was less impressive, coming in 0.6% below analysts’ estimates. Its non-GAAP profit of $0.18 per share was 22% above analysts’ consensus estimates.
Unity reported second-quarter revenue of $440.94 million, beating analyst estimates of $425.46 million, according to Benzinga Pro. The company reported second-quarter adjusted earnings of 18 cents per share, beating estimates for a loss of 27 cents per share.
A number of stocks jumped in the afternoon session after the Software as a Service (SaaS) sector rebounded following the sell-off in the previous trading session as a weaker-than-expected U.S. jobs report increased the probability of a Federal Reserve interest rate cut. The July Nonfarm Payrolls (NFP) report showed the U.S. economy added only 73,000 jobs, significantly below the 110,000 forecast. This, combined with downward revisions for May and June, signaled a cooling labor market to investors. In response, market expectations for a September interest rate cut by the Federal Reserve surged from roughly 40% to over 80%. A potential rate cut is generally favorable for growth sectors like technology and SaaS, as lower rates can increase the present value of their future earnings, boosting stock valuations.
Shares of game engine maker Unity (NYSE:U)
fell 3.3% in the morning session on continued negative momentum after BTIG downgraded the stock to Sell from a Neutral rating. The investment firm set a price target of $25 per share. The analyst noted that the stock, which had doubled in value over the past year, had an overenthusiastic valuation that did not accurately reflect the necessary improvements needed in Unity's core business. This downgrade occurred ahead of the company's upcoming earnings report on August 6th, which led investors to reassess their positions.
Shares of game engine maker Unity (NYSE:U)
fell 3.5% in the afternoon session after analysts at BTIG downgraded the stock from "Neutral" to "Sell" and set a new price target of $25.00.
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Shares of game engine maker Unity (NYSE:U)
jumped 12.4% in the morning session after Jefferies analyst Brent Thill raised his price target on the company to a Street-high of $35. The new price target represents a nearly 18% upside from the stock's previous close and a 20.69% increase from Jefferies' prior target of $29. The firm maintained its "Buy" rating, citing improving sentiment around Unity's ad-targeting model, Vector. Thill noted that positive mentions for Vector increased in the second quarter and that its Return on Ad Spend (ROAS) for clients improved to a 10%-20% lift, up from 5%-7% in the prior quarter. Driven by the expected improvements, Jefferies raised its revenue forecasts for Unity for 2025 and 2026. The analyst also highlighted that usage for the new Unity 6 engine is growing, indicating stability in the company's Create segment.
